Rodney Adler’s angst gets a big run today after his appearance in NSW
Supreme Court yesterday. “Adler finally admits it: I was stupid and I
lied” is how the Fin Reviewbanners
its front-page story, which reports on Adler’s court admission he “made
a wrong decision and put my interests in front of those of HIH”, and
finally admitted that he “acted dishonestly”. All papers also report on
Adler’s disclosure yesterday that he has returned his Order of
Australia honour to the governor-general.

Investment bank UBS
and corporate adviser Caliburn Partnership are in the box seat to
benefit from the hundreds of millions of dollars in fees expected to
flow from the sale of the last slice of Telstra, after being appointed
to advise the government on handling the likely $33 billion asset sale,
reports the SMH. While it’s a massive trophy for the UBS and Caliburn brands, comments Elisabeth Knight, “it won’t earn them a lot of money and it will be a major challenge.” At The Australian, Bryan Frith
says what sets the boutique advisory house Caliburn apart from the
major integrated investment banks is that “Caliburn has no distribution
arm, so its advice is fully independent, and seen to be”. And The Age’sStephen Bartholomeusz
says UBS and Caliburn are ultimately after the “prestige associated
with designing the framework for the world’s largest-ever share
offering” and are now “in the box seat for a major and more rewarding
role in the actual sell-down”.

A “dysfunctional share register”
was a prime reason renewable energy company Pacific Hydro put itself up
for sale last year, writes John Durie in the AFR”s
Chanticleer column, and its 32% shareholder Industry Funds Management
“isn’t about to let a better-than-expected sale price end its fun.”
IFM’s fund icon Garry Weaven has thrown a spanner in the works at
Pacific Hydro, reports Rod Myer in the SMH,
rejecting yesterday’s $709 million offer from Spanish group Acciona,
despite the two directors he appointed to the Pac Hydro board giving
the bid their approval. Weaven “wants long-term exposure to Pac Hydro
and has the power to scuttle the bid in its present form” because he
controls that 32% stake. Acciona’s offer of $4.50 a share has a 90%
acceptance condition, but “our position is that we’re a long-term
investor, not a seller,” Weaven said. Alan Kohler in The Age and SMH
says that the “crazy Spaniards” probably think €515 million ($866
million) for Pacific Hydro is a steal, “even though chairman Bernie
Wheelahan quite reasonably points out that it’s a 44% premium to the
company’s share price before the sale process began and a control
premium started to be added by the sharemarket.”

The SMHalso
reports that hospital operators Healthscope and Nova Health went into
trading halts yesterday ahead of what one called a “significant”
announcement and the other “material”. Either way, investors believe a
friendly merger is on the cards with an announcement expected today.

Meanwhile, in his News Limited column across the country Terry McCrann
looks at the interest rate-inflation nexus, predicting that if
“inflation does not break out in any serious fashion, US rates might
level off around 4%”, but if inflation does break out they could go to
6% or even higher. His McCrannesque analysis of that situation is as
follows: “Arguably if counterintuitively, it would probably be ‘better’
if the latter happened. That we got (relatively) serious inflation in
the US and a serious interest rate response. Why? Because that would
produce a reasonably conventional exit. A painful recession for them –
and damaging fall-out for us. But a ‘burning-out’ of much of the
imbalances in the US economy and financial markets.”

And The Australianreports
on its front page on the woes of one of the icons of Australian book
retailing, Collins Booksellers, which is “in deep financial trouble and
requires a large capital injection to survive.” Also inThe Australian Alan Wood
writes about the re-emergence of that “rare and fabled beast,” the
50-year government bond, which is “one more signal of how unusual
conditions are in world financial markets” .

The Wall Street Journal(subscription
required) has a fascinating front-page report on China’s huge push into
Africa. To secure access to “the continent’s vast natural resources,”
says the Journal, “China is forging deep economic, political and
military ties with most of Africa’s 54 countries.” And the Financial Times(subscription
required) reveals that the Church of England’s £4.3 billion investment
fund was the second-best performer of more than 1,000 funds over the
past decade.

Peter Fray

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